Hobart is one of the top growers in the national property market, and it’s showing no signs of slowing down
Hobart is still going strong, and the positivity is spreading to other areas of the Apple Isle.
“There is no doubt about it – Hobart is now at the top of the shopping list in regard to growth across the country,” says Josh Hart, director at One Agency Launceston.
“I predict this isn’t going to slow down any sooner, with a number of capital projects in tourism and housing about to start in the next 12 to 18 months to continue the transition of Hobart to becoming a true capital city.”
CoreLogic data indicate that property prices in Hobart rose by 13.4% over the 12 months to November 2017. The gross rental yield comes in at an average of 5%. Vacancy rates are tight in the capital, and buyers are beginning to look to other parts of the state that are even more affordable and offer higher returns.
“Launceston provides 5%-plus gross yield for half the price of Hobart around major hospitals in the CBD and city-fringe suburbs such as South Launceston and West Launceston,” Hart says.
“North West Tasmania (Devonport and Burnie) is ideal for investors looking at spending minimal outlay to start their property portfolios in a strong and consistent rental market under $300,000.”
Many first-time buyers are choosing to enter the Tasmanian property market after being priced out of bigger markets like Sydney and Melbourne.
Rents on the rise
Charles Tarbey, chairman and owner of Century 21 Australasia, believes the influx of demand in a market with low supply, and the subsequent increase in dwelling prices, is the result of Tasmania experiencing fallout from the declining Victoria market. This will also take its toll on rental rates.
“I believe investors should remain wary of the potential for rent prices and vacancy rates to come under pressure in coming months,” Tarbey says.
According to a media release from the Real Estate Institute of Australia (REIT), Hobart recorded the highest increase (2.8%) of all capital cities in the median rental rate for three-bedroom houses over the September 2017 quarter.
Rental affordability as a whole fell during this period, according to REIT. The proportion of income required to meet median rents rose to 26.3% in Hobart, representing an increase of 0.5% over the quarter and 2.3% compared to September 2016.
SUBURB TO WATCH
BLACKMANS BAY: Favourable prices in beachside suburb
Named for original occupant James Blackman, the suburb of Blackmans Bay is enjoying considerable demand, being only a short distance from Hobart.
Dwelling prices have risen steadily over the five years to December 2017 - both houses and units recorded more than 10% growth from 2016 to 2017. Nevertheless, units remain quite affordable at a median value of %326,236, while the average rental yield is high, at 5%.
Blackmans Bay has many features that are attractive to would-be residents, including several primary schools, a shopping centre with a supermarket, and proximity to the beach. The beach is linked to Flowerpot Point, a popular fishing spot.
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